Henderson argues commercial property remains ‘attractive’

Henderson Global Investors has reassured investors on the “fundamental benefits” of investing in commercial property sector.

In an update on its website, the group says: “If the UK’s negotiations with Europe are managed well, there should not be a long-term change to the fundamental benefits of investing in UK commercial property, which we believe remain attractive as part of a multi-asset portfolio diversifier, given its supply of steady contractual rental income, strong legal and regulatory framework and market transparency.”

Henderson says while property investment is “not without risks”, continued lower rates environments and potential further QE will boost the appetite of income-yielding assets, like UK commercial property.

The fund’s manager Ainslie McLennan says sentiment within the UK commercial market appears “calmer” following the weeks after the referendum.

She says: “Despite the summer typically being a quiet period for investment activity, we have completed a number of sales within the fund.

“Liquidity is being raised with a view to re-opening the fund to daily dealing as soon as practicable.”

The fund has sold seven properties in August and two in September. Those include Amazon distribution centre in Peterborough, Kellogg’s distribution unit in Manchester, The Roebuck in Chiswick and The Ship in Mortlake, Barclays in Market Street in Manchester, Lloyds Bank, Islington, London, and an office, Trimbridge House in Bath.

This has helped raise the fund’s liquid assets to 13.9 per cent at 31 August 2016. As of September the cash holdings increased to 16.9 per cent.